Oil drops below $60 as traders eye company results

Oil prices dropped below $60 a barrel Friday in Asia as investors braced for a slew of company earnings reports next week that will provide clues on the strength of crude demand.

Benchmark crude for August delivery was down 68 cents at $59.73 a barrel by late afternoon Singapore time in electronic trading on the New York Mercantile Exchange. On Thursday, the contract rose 27 cents to settle at $60.41.

Oil has bobbed near $60 a barrel the last two days after dropping from an eight-month intraday high of $73.38 on June 30 on investor concern that a rally since March wasn't justified by weak global crude demand.

"All the focus is on demand," said Christoffer Moltke-Leth, head of sales trading for Saxo Capital Markets in Singapore. "The second quarter earnings season is going to be very important for crude."

Results over the next few weeks from multinational mass market retailers — such as Colgate Palmolive, PepsiCo, and Johnson & Johnson — will help investors better gauge the strength of the global economy.

"These companies have a good feel for how demand is around the world," Moltke-Leth said. "What they say is going to be important for the near-term outlook for oil."

In other Nymex trading, gasoline for August delivery fell 1.90 cents to $1.64 a gallon and heating oil dropped 1.74 cents to $1.52. Natural gas for August delivery was steady at $3.41 per 1,000 cubic feet.

In London, Brent prices fell 71 cents to $60.39 a barrel on the ICE Futures exchange.